Selling is Marketing but Marketing is not Selling

Posted: November 3, 2010 in marketing, selling
Tags: ,

 

 

“More than 30 years after the call to integrate sales and marketing activities ,… we find no firms that had adopted this recommendation” finds Workman, Homburg, and Gruner. Why? Or, more importantly, is this a good thing?

Recent research which maps the strengths of sales and marketing into market performance points to an underlying cause of this permanency in the struggle between sales and marketing: The disagreements can lead to higher performance.

Homburg and Jensen looked at a number of factors regarding competencies and orientations of sales teams versus marketing teams. They importantly examined the effect of these differences on performance as measured by profits and revenue.

 On one hand, differences between sales and marketing can lead to infighting and wasted time on arguments without results. On the other hand, different viewpoints are valuable to developing the right approach at the right time. Homburg and Jensen’s research revealed that the value of applying contrasting points of view outweighs the challenges of allowing disharmony when it comes to performance and contrasting thought worlds, or orientations, of sales versus marketing.

Referring to the work of Cespedes, sales and marketing are oriented in two different key dimensions: product versus market focus and short versus long time horizon focus.

In the product versus market focus, we often find marketing in the product corner and sales in the market corner. In this paradigm, a product focus refers to maximizing individual product line profitability, balancing the product portfolio, and discontinuing less profitable products while a market focus refers to being more account oriented and maximizing channel or customer relationships. At issue is the orientation towards building the product versus developing relationships with buyers. Conflicts can arise when a product orientation argues to discontinue an unprofitable product while a market orientation counters that that product is a key anchor in a customer relationship.

In the short versus long time horizon focus, we often find sales in the short horizon frame and marketing in the long horizon frame. Sales tends to be more focused on immediate action and immediate results, and are compensated and promoted on achieving immediate goals. Marketing tends to focus more on long term product plans and market actions and are compensated and promoted on longer term goals. Conflicts can arise when a short-term thinking argues in favor or taking a pricing action to keep a customer while the long-term thinking argues in favor of maintaining price integrity to achieve strategic positioning and profitability goals.

In many cases, there are also differences in sales and marketing in terms of their competencies meaning skill sets and knowledge. Interpersonal skills, depth of product knowledge, and depth of market knowledge can vary between the sales and marketing teams. In the Homburg and Jensen study, interpersonal skills referred to sustaining conflicts, communicating, and convincing. Market knowledge implied being knowledgeable of customers and competitors while product knowledge implied being knowledgeable about products and internal processes. Variations in competencies are well known. What is important to gain from their study is that these differences affect outcomes.

In examining the effect of contrasting orientations and competencies on operating profits and revenues, Homburg and Jensen found that differences in orientation are associated with better performance, while differences in competencies are associated with poorer performance.

Why are contrasting orientations good for performance? Contrasting orientations enable multiple viewpoints to address a challenge, thus yielding more optimal decisions. Marketing needs sales and direct customer interaction to strike them with reality when setting unrealistic list prices. And, in contrast as noted by Schweiger, Sandberg and Ragan: “Faced with price pressure from customers, sales may be tempted to myopic price cuts (and thus, revenue and profit sacrifices) if marketing did not act as the devil’s advocate.”

Utilizing both orientations within both issues, the short versus long time-horizon and the product versus market focus, yields better decisions and ultimately higher profits.

If contrasting orientations are good, why are varied competencies bad? When individuals have severely differing funds of knowledge, they cannot easily share ideas, thus damaging a cooperative and collaborative work environment. Marketing needs to have interpersonal skills like sales. Marketing should also interact directly with customers in order to firmly ground their fact base. Likewise, sales needs to be cognizant of the market trends and product pathways in order to guide their competitive actions.

In other words, both sales and marketing need to be competent when it comes to interpersonal skills, market knowledge, and product knowledge. They need to respect each other’s knowledge domains and learn means to integrate the other’s knowledge into their decisions. But when it comes to their orientation on how they see the world, celebrate the differences if you want to win.

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Comments
  1. Dilip Mutum says:

    I beg to disagree. The fundamental problem is that marketing and selling are not different orientations. Selling is part and parcel of the overall marketing process – in other words, selling is a subset of marketing.

    I wrote about this a couple of years ago: http://blogs.warwick.ac.uk/dilipmutum/entry/selling_is_not/

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